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The importance of service quality in British Muslim’s choice of an Islamic or

non-Islamic bank account

Abstract

Using an extended SERVQUAL model, this study identifies and compares the

importance of service quality to Muslim consumers with an Islamic or non-Islamic

bank account in a non-Muslim country, Britain. Eight group discussions and survey

with 300 Muslims were conducted. Five dimensions of service quality were

identified, i.e. Responsiveness, Credibility, Islamic Tangibles, Accessibility and

Reputation. These differ in structure and content from the original SERVQUAL

developed in the west and the subsequent CARTER model constructed in a Muslim

country. In addition, significant differences were found in the importance rating of

items by respondents holding an account with an Islamic bank compared to those with

a non-Islamic bank account. This study is one of the first to identify and compare the

importance of service quality between Islamic and non-Islamic bank account holders

in a western non-Muslim country. The results advance our understanding of the

impact of culture on SERVQUAL. The study provides insight into Muslims’ bank

choice and helps bank managers of both Islamic and non-Islamic banks to focus their

attention on the service quality dimensions that matter most to Muslim customers.

Key words. SERVQUAL, CARTER, Service quality, Islamic Banking, British

Muslims,

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The importance of service quality in British Muslim’s choice of an Islamic or

non-Islamic bank account

Introduction

The global Islamic banking market is estimated to be worth $920 billion and projected

to grow to more than $1.6 trillion by 2020 (EY, 2016). This rapid growth is due to

demand from a large and growing Muslim population which is anticipated to make up

more than a quarter of the global population by 2030 (Pew Forum, 2015); and to

changes in national banking systems that have facilitated a growth in the supply of

Islamic products as new providers enter the market (for an overview see Rammal,

2015)

To-date there have been numerous studies seeking to identify the SERVQUAL items

used by consumers to evaluate their bank. Extant studies focusing on Islamic banks

have found support for the importance of items similar to those in SERVQUAL, but

have also included religion and compliance with Shariah, i.e., Islamic law (see for

example, Saqib et al, 2016; Thaker et al, 2016; and Othman and Owen 2001). Studies

have however been inconclusive, particularly for the inclusion of religion with some

finding support for religion (Rehman, 2012; Al-Ajmi, Hussain and Al-Saleh 2009)

and others finding little or no support (Ali and Raza, 2015; Erol and El-Bdour, 1989;

Erol, Kaynek, El-Bdour, 1990). In addition, almost all studies have been conducted in

eastern and predominantly Muslim countries (Saqib et al, 2016; Thaker et al, 2016;

and Othman and Owen 2001; Metawa, 1998; Naser, Jamal and Al-Khatib, 1999;

Dusuki and Abdullah, 2007).

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It is well established that culture and nationality have an impact on SERVQUAL

(Nguyen et al, 2015), indeed one of the major criticisms of SERVQUAL is the need

to take account of different contexts (Cronin and Taylor, 1992; Buttle, 1996). It is

therefore not surprising that studies have repeatedly found customers to have different

views on SERVQUAL based on their culture and nationality (see for example,

Wongrukmit & Thawesaengskulthai, 2014). Such differences are however also likely

to occur due to acculturation, for example, where consumers move from their home

country to take residence in another host country, or those who are first or second

generation immigrants, as they hold onto their culture of origin or choose to assimilate

with their new culture (Appostolova-Blossom, 1999). However, as Sekhon (2015)

observes, decision making in such circumstances is not likely to be neatly categorised

as there will be a blurring of the boundaries between home and host country. The take

up of Islamic banking in Britain has been slow and disappointing (Griffiths, 2010).

Reasons for the failure have been speculated, however empirical research is required

to establish the basis on which British Muslims evaluate the service quality of their

banks. It is therefore of both theoretical and practical interest to understand how

British Muslims view service quality and its impact on their consumption choices.

Using an extended SERVQUAL model, this paper aims to identify and compare the

importance of the SERVQUAL items used by British Muslims living in a non-

Muslim country when evaluating the service quality of their Islamic or non-Islamic

bank. The research questions are: what items and dimensions are important to British

Muslims when evaluating the service quality of their bank; and what differences exist

between the service quality perceptions of Muslims with Islamic bank accounts and

those with non-Islamic bank accounts.

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This paper is structured as follows: first, the background to Islamic banking in the UK

is presented, this is followed by a discussion of the theories that provide the

foundation to this study. The methodology is then outlined, followed by the empirical

findings, discussion and conclusion. The paper concludes with its contribution,

limitations of the study, future research and implications for practice.

Background to Islamic Banking in the UK

The UK has a strong Muslim presence, accounting for 2.7 million or 4.5% of the UK

population (ONS, 2011). This is the largest ethnic minority in the UK. Muslims are

excellent prospects for banking and financial products with an estimated 10,000

Muslim millionaires (Travus, 2009), total savings of £1 billion and approximately

25% having annual incomes of over £30,000 (Matthews, Tlemsani and Siddiqui,

2003).

Islamic banks perform the same essential functions as non-Islamic banks, except they

carry out their transactions according to the principles of Islamic (Shariah) law.

Shariah forbids interest, therefore Islamic financial institutions use a number of

financing techniques to derive returns for their customers based on transactions

associated with tangible assets (for more detail on how Islamic banks work see

Rammal, 2015). Britain has the most developed Islamic financial services sector in

the western world (Mair and Khan, 2015). Islamic banks first entered the UK in the

1980s (Cunningham, 1996) with the Al Baraka International Bank being an early

pioneer. Others have since followed, for example, the United Bank of Kuwait and Al

Ahli United Bank, the UK based Europe Islamic Investment Bank and the Qatar

Islamic Bank. The UK is home to the first wholly Shariah compliant retail bank in the

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west, Al Rayan (formerly the Islamic Bank of Britain), which was authorized by the

FSA in 2004 (FSA, 2006). The UK banking sector is highly competitive and all banks

(both non-Islamic and Islamic) need to know how to attract and retain customers.

Service Quality, Banks and Islamic Banks

Service quality is viewed as an important issue for businesses due to its apparent

relationship with customer satisfaction (Bolton and Drew, 1991), customer retention

(Reichheld and Sasser, 1990) and profitability (Rust and Zahorik, 1993). Businesses

that manage their service quality well are therefore more likely to be successful

businesses.

Most previous research on service quality has used the SERVQUAL instrument,

developed by Parasuraman et al (1985) and constructed of 22 items forming originally

10 dimensions which were subsequently reduced to 5. SERVQUAL has been applied

to a wide range of service industries, including financial services. Despite its

widespread use (Ladhari, 2012), SERVQUAL has been criticised. Many researchers

(e.g. Nugyen et al, 2016; Carrillat, Jaramillo and Mulki, 2007; Buttle, 1996; and

Cronin and Taylor, 1992) suggest that service quality cannot be applied universally,

the effect of a consumer’s culture and context need to be considered. Indeed, Lapierre

(1996) concluded that the search for a universal conceptualization of service quality

may be futile and that service quality needs to be measured and described in the

language of those providing the data. In addition, Malhotra et al (2005) suggest that

other factors, such as whether or not a customer lives in a developed or developing

country, can influence the SERVQUAL dimensions. These authors all highlight the

need to develop SERVQUAL for each context, by industry, by culture or both.

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Historically, service quality has been viewed as an important issue in the banking

industry (Stafford, 1994). Indeed, service quality is considered the primary factor in

customer satisfaction with banks due to its impact on customer loyalty (Gait and

Worthington, 2008). Perhaps as a direct result there has been a wide range of studies

that have examined SERVQUAL in a banking context (see for example, Avkiran

1994; Haque, 2010; Mersha and Adlaka, 1992). The majority of studies have

measured service quality by replicating or adapting the SERVQUAL model (e.g. Ali

and Raza, 2015; Bose and Gupta, 2013; Aldlaigan and Buttle, 2002). In almost all

studies the items have been amended to reflect the banking context, for example price

has been changed to include service charges (Javalgi et al, 1989) or interest on

savings (Laroche et al, 1986). Others have adapted the measurement, for example,

BANKSERV (Avkiran, 1999) is a single scale measurement of service quality where

customers can reflect their perceptions and expectations in a single statement; and

Ennew et al (1993) and Hemmasi et al (1994) used the importance-performance

measure, which looks at how well a service attribute meets customer needs.

SERVQUAL has also frequently been used with Islamic banks to measure service

quality. The CARTER model (Othman and Owen, 2001), was the first SERVQUAL

based model to be developed for the Islamic banking industry. Notably, it has as a

sixth dimension ‘compliance with Islamic law’ which includes items such as, run on

Islamic law and principles, interest neither paid nor taken on savings and loans,

provision of Islamic products and services, provision of free interest loans and

provision of profit sharing investment products. Othman (2003) called for researchers

to examine the model’s validity and to measure overall service quality levels in the

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Islamic banking industry in different locations. Subsequent studies have tended to

adopt this model but primarily for research conducted in Muslim countries (see for

example, Shafie, Azmi and Haron, 2004; Ciptono and Soviyanti, 2007; Rehman,

2012).

The UK is a multi-cultural society and the Muslim population is a significant minority

group (ONS, 2011). , Acculturation, i.e. the degree to which Muslims hold onto their

home culture or choose to assimilate with their new host culture (Appostolova-

Blossom, 1999), will potentially impact the service quality measure. Berry (1997)

identified four acculturation possibilities. In the context of this study, assimilation

would be where Muslim’s do not wish to maintain their Islamic cultural identity and

seek daily interaction with the host cultures; separation, would be where Muslims

hold onto their original Islamic culture; Integration would be evidenced by the

maintenance of some degree of Islamic integrity while also seeking to participate as

an integral part of the larger social network and finally, marginalisation, would be

where Muslims have little possibility or interest in cultural maintenance.

This study responds to Othman’s call for the further development of a service quality

measure for Islamic banking, but seeks to develop a modified SERVQUAL/CARTER

model for Muslims in a non-Islamic country. The two research questions to be

addressed are: what items and dimensions are important to British Muslims when

evaluating the service quality of their bank; and, second, what differences exist

between the service quality perceptions of Muslims with Islamic bank accounts and

those with non-Islamic bank accounts.

Methodology

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Data was collected by means of a classic two stage, mixed methods approach. In stage

one, 8 group discussions were conducted with 36 Muslims to explore the relevance of

a set of service quality items generated from the literature, generate new items and

validate the descriptors and check the definitions of the words used. All groups were

asked open questions to stimulate discussion, for example, what they liked/disliked

about their bank, how they judge good/poor service? Group discussions were

conducted in English, although Arabic (the moderator’s mother tongue) was used

when appropriate to help define words and aid understanding where appropriate.

Group discussion participants were predominantly aged between 20 and 40 years old

(27 participants) and married (26). 22 of the participants were male and 14 were

female. Most had lived in England for 10 or more years. The majority of participants

were highly qualified, 12 held a bachelor degree and 11 a Masters, another 10 held

college, high school or secondary school qualifications. The participants represented a

mix of occupations and professions, for example, lawyers, doctors, administrators,

police and included students and housewives.

The findings from stage one were used both to inform and direct the development of

the items used in the stage two survey. Analysis of the groups identified support for

34 items which included items from the original SERVQUAL and CARTER models

and new items that emerged from the 8 focus group discussions (see Table 2 for a

listing). Support was found for 19 service items closely matching those appearing in

SERVQUAL (the 3 that were not supported were: neat appearance of employees,

visually appealing materials associated with service, and insisting on error free

records). Support was also found for an additional 5 items specifically concerning

bank service (e.g. bank location, confidentiality, service charges, etc.) typically found

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in bank service quality studies. In addition, a further 10 items linking directly to the

Islamic nature of the bank were identified from the group discussions. 3 overlapped

with the CARTER model (Othman and Owen, 2011), namely, run on Islamic

principles, provision of Islamic products & services, and provision of free interest

loan. The additional new Islamic banking items to emerge from the groups included

confidence in bank’s Shariah advisors, female staff wear hijab, bank has a prayer

room, closing for Friday prayer, and separate department for ladies. Together these

items account for the 34 items used in the survey (see Table 2).

In stage two, a survey was used. A pilot was first conducted with 12 Muslims 7 non-

Islamic bank account holders and 5 Islamic bank account holders) to test the

questionnaire in terms of clarity, layout, length and completion time. All pilot

respondents completed the questionnaire in the presence of the researcher. As a result

of the pilot test, questionnaire phrases were simplified to aid understanding for those

with English as a second language.

Questionnaires were then distributed by hand at places where Muslims congregate, for

example, Islamic centres, Muslim community centres and, schools. To avoid any

religious overtones and bias, questionnaires were also distributed at supermarkets,

shops, restaurants, cafes, parks etc. A convenience sample was used, individuals were

identified to take part in the survey if they confirmed that they were Muslim and lived

in the UK. Data collection took place at locations known to have a high number of

Muslims, i.e. London, West Midlands and the North West England (ONS, 2011).

Questionnaires were handed to respondents for self-completion and the researcher

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waited to collect them. 350 completed questionnaires were received, however, only

300 (86%) were suitable for analysis due to incomplete or missing data.

Respondents were asked to rate each of the 34 service quality items according to

importance on a 5 point Likert scale. Questionnaires were analysed using SPSS.

Exploratory factor analysis (Principal Components Analysis: PCA) was used to

identify a smaller number of linear combinations of the original variables in a way

that captures most of the variability in the pattern of corrections (Pallant, 2005; and

Field, 2005). Table 2 depicts the results and identifies the items and factors used by

Muslims when considering the importance of service quality for their bank. The Mann

Whitney test was used to test for a significant difference between two samples that are

independent and may be of different size (Curwen, and Slater, 2002). In this study,

Mann-Whitney was used to test the differences between Islamic bank account holders

and non-Islamic bank account holders’ importance of the service quality items.

Findings

Respondent Profile

Respondents completing the survey included slightly more males (58%) than females

(42%) with just over half (52%) of respondents married. Age wise, 49% were aged up

to 30 years old, 32 % of the sample were between 31and 40, and 19% were aged

between 41and 51 years old. In terms of income, just under one third earned less than

£10,000 p.a., just over one third earned between £10,001 and £20,000 and the over

one third earned over £20,000. See Table 1 for a full details of respondent profile.

[insert Table 1 around here]

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32% of respondents held Islamic banks accounts (85% of which held an account with

an Islamic bank and 15% with a non-Islamic bank via an Islamic window) and 68%

were non-Islamic bank account holders. Although the number of respondents with

Islamic bank accounts was disappointing, this reflects the low take up of Islamic bank

accounts in the UK (Griffiths, 2010) and is comparable to other studies (e.g. Kumar et

al, 2010).

Dimensions of Service Quality

All 34 items loaded on 5 factors (the service quality dimensions) with eigenvalues

exceeding 1. The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy exceeds

the recommended value of 0.6 (Pallant, 2005, Field, 2005) at 0.925. This value

suggests that the identified clusters are compact enough to ensure that the factor

analysis will give distinct and acceptable factors, and the sample used was adequate.

In addition, the Bartlett test was highly significant (sig. =0.000), which indicates that

there are sufficient significant correlation coefficients to ensure that the factor

analysis processes can be applied.

[Insert Table 2 around here]

Most of the service quality items loaded with correlation coefficients of more than

0.50, and only two items (easy bank to deal with and bank reputation) loaded with

correlation coefficients less than 0.50 (0.48 and 0.46 respectively). The 5 factors

explain 16.48%, 15.96%, 11.57%, 10.96% and 10.08% of the variance respectively.

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Factor 1: Responsiveness. This factor is the strongest of the 5 dimensions, but by a

small margin. It nevertheless represents the most important items that British Muslims

want to see in their banks. This factor loaded on 9 items comprising a combination of

items from the SERVQUAL dimensions responsiveness and empathy and the

CARTER dimensions of assurance and responsiveness. This factor concerns the

friendly, polite and knowledgeable nature of the bank employees; and the speed and

efficiency of the service provided. In contrast to CARTER (Othman and Owen, 2001)

which loaded first on Compliance, this factor does not include any reference to the

Shariah requirements for an Islamic bank.

Factor 2: Credibility. This consists of 11 items and closely matches the original

SERVQUAL dimensions of credibility and security and overlaps with the CARTER

model on the dimensions of empathy and compliance with Shariah law. The

Credibility factor includes items directly relating to the Islamic nature of the bank, for

example, confidence in the bank’s Shariah advisors and the bank running according to

Islamic law. In addition, it also includes more general items; for example, secure

banking, confidence in the bank’s management and accurate statements. Credibility

ranks a close second in terms of importance to Responsiveness. This supports the

earlier work of Jabnoun and Al Tamini (2003) where similarities were also found

between these two dimensions.

Factor 3: Islamic Tangibles. Previous researchers (Parasurman et al, 1991, Zeithaml

and Bitner, 2003 and Jabnoun and Al Tamimi, 2003) defined tangibles as the

appearance of physical facilities, equipment, personnel and communication materials.

The CARTER model also included the external appearance of the bank and the

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opening hours (Othman, 2003). Islamic Tangibles loads on 5 items and the tangible

evidence relates to the bank being seen as truly Islamic, e.g. female staff wearing

hijab, providing a prayer room, a separate department for women and closing for

Friday prayer time. Evidence from the earlier group discussions suggests that Islamic

Tangibles are particularly important in a non-Muslim country to reassure customers

that the bank is truly ‘Islamic’.

Factor 4: Accessibility. Of the 5 items loading on this factor, 4 centre on the original

SERVQUAL dimension of access. For example, the number of cash machines,

convenient opening hours, wide range of services (e.g. financial advisor) and bank

location. The CARTER model classified some of these items as tangibles, reflecting

their physical nature. Notably, low service charge is also included in this dimension

and perhaps reflects the notion that a high service charge would prevent customer use.

Factor 5: Reputation. This factor loads on 4 items: bank size, well known bank,

Islamic architecture and modern looking equipment. 3 of the 4 items are similar to

those in Factor 3, Islamic Tangibles, in that they refer to tangible evidence (the bank’s

size, buildings and equipment). As Reputation also loads on well-known bank this

suggests that this factor is about the bank’s overall reputation.

It is notable that in this study items relating to the Islamic nature of the bank appear in

4 of the 5 factors, however in CARTER, Islamic items load on just one factor,

Compliance. This embeddedness of the Islamic items may reflect a desire for British

Muslims to have greater reassurance about the Islamic nature of their bank at different

touch-points.

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In this section, we identified the bank service quality dimensions as rated by British

Muslims. In the next section, we explore how the rating of these dimensions differ

between British Muslims choosing an Islamic and a non-Islamic bank.

Bank Choice

To test whether or not a relationship exists between respondents’ rating of the items

by importance and their bank (i.e., Islamic or non-Islamic) a Mann-Whitney non-

parametric test was used. A significant difference was found to exist with respect to

twelve items, which mainly belong to the Credibility and Responsiveness dimensions,

as shown in Table 3

[Insert Table 3 about here]

If we compare the mean rankings of non-Islamic bank account holders with those of

Islamic bank account holders it can be seen that the responses of the former exceed

those of the later. This means that these items are more important to non-Islamic Bank

account holders. In addition, if we compare the median values of each proposed item,

the non-Islamic bank accountholder medians are either equal to or higher than the

Islamic bank account holders. Thus, the non-Islamic bank account holders rate these

items as being more important than the Islamic bank account holders.

The items that were rated as more important by non-Islamic bank holders relate to 3

of the dimensions identified in Table 2: Credibility, Responsiveness and Accessibility.

The Credibility items rated higher by non-Islamic bank account holders concern

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secure banking, safety from political action, confidence in bank management, bank

reputation and confidentiality of customer information. Themes to emerge from the

group discussions provide insight into this finding. Respondents reflected on Islamic

banks that had closed and western governments who had in the past frozen the bank

accounts of Muslims. It would appear that in response to these concerns some British

Muslims were choosing to bank with non-Islamic banks for credibility and, in

particular, security reasons.

The Responsiveness items concern helpfulness, friendliness and the politeness of

employees who can solve problems quickly. Non-Islamic bank account holders

therefore place higher importance on the interaction with staff than their non-Islamic

bank account holder counterparts. Customer service was considered important to

these consumers. Finally, non-Islamic bank account holders place greater importance

on Accessibility and in particular convenience as they rated the following items more

important than their Islamic bank account holding counterparts: convenient bank

location and convenient opening hours.

Discussion and Conclusion

This research identified 34 items and 5 dimensions that can be used to evaluate the

service quality preferences of Muslim customers in Britain. The items loaded

differently to those in the original SERVQUAL and CARTER models.

Responsiveness, Accessibility and Reputation more closely resemble the original

SERVQUAL instrument, whereas Credibility and Islamic Tangibles specifically

concern Islamic based items. It is interesting to note that Responsiveness, is viewed as

the most important factor (albeit marginally) for British Muslim customers whereas in

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the CARTER model, conducted in Kuwait, the Islamic or ‘compliance’ factors’

loaded first. This study therefore reinforces the multi-dimensional nature of service

quality (Othman and Owen, 2002) and the need to develop different service quality

instruments for different contexts and cultures (Cronin and Taylor, 1992; Buttle,

1996).

In addition, the findings highlight the potential influence of acculturation on service

quality preferences. British Muslims appear to demonstrate evidence of integration

(Berry, 1997) through the higher rating of Responsiveness as important in service

quality but retain Islamic items in most of the other dimensions. Those choosing to

bank with a non-Islamic bank rated the service quality factors differently to those with

an Islamic bank account. The choice of an Islamic account may be evidence of

separation (Berry, 1997) and ground the individual in their Muslim identity as they

hold on to their original Islamic culture.

In this study we considered British Muslims as one group, however, we have

identified that British Muslims are not one homogenous group with respect to service

quality and banking. Acculturation is a complex concept (Phinney, 2003) and this

study has provided only a preliminary insight into this area. Further work is required

to understand in more detail British Muslims’ attitudes and acculturation strategies

with respect to banking. Previous studies have tended to explore banking as a pre-

cursor to acculturation (Gail Perry, 2008); we call for further research to identify how

acculturation can impact perceptions of service quality and banking behaviour.

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This study has implications for bank managers. All respondents rated items

concerning employee skills as important and these featured prominently in the first

dimension, Responsiveness. Those banking with non-Islamic banks rated these items

as particularly important. Employees continue to play a significant role in bank

customer interaction and Islamic banks are recommended to develop their employees

to deliver a good and personal service to their customers and so increase customer

satisfaction. This might be achieved through training and education programmes with

a focus on Islamic law and its impact on banking products and how different products

meet the requirements of Shariah law.

Accessibility was rated as more important by non-Islamic bank account holders.

Islamic banks can take steps to address this by, for example, providing more cash

machines, internet banking and expanding their branch network so that they are more

visible in the market and create greater awareness of their presence. Participants in the

group discussion suggested that Islamic banks could also achieve this by co-operating

with other well-known banks, organisations, and large supermarkets thereby

expanding their distribution. Group discussion participants also suggested that such

links would also help Islamic banks to gain the trust of British Muslims as they are

not highly visible in the UK when compared to the non-Islamic banks that have a

branch on every high street.

The findings of this study highlighted the importance of Islamic Tangibles that would

reinforce the Islamic nature of an Islamic bank. These include the visible cues of a

separate department for females, a prayer room and female staff wearing hijab. Within

the group discussions, participants also suggested that more information could be

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provided by Islamic banks on, for example, the background and expertise of those

individuals who were their Shariah advisors. Previous studies (Ashraf, Robson and

Sekhon, 2015) have suggested that customers of Islamic banks do not necessary have

trust and confidence in the Islamic compliance of their bank and such measures will

help to provide reassurance.

British non-Islamic banks already have a higher market share than their Islamic bank

counterparts within the Muslim community. If they are continue to occupy this

dominant position they need to highlight those features that appeal most to British

Muslims, customer service, convenience and safety. The latter is perhaps the most

challenging given the recent banking crisis. However, banks can communicate the

measures that are in place to safeguard consumer accounts.

Limitations and Future Research

As with all studies, this research is not without its limitations and these form the basis

of our suggestions for future research. First, this study was undertaken in Britain and

the SERVQUAL instrument was developed for banks in this market. This scale may

be applicable to Islamic banks in other European and/or western countries. However,

caution is recommended as the UK Islamic banking sector is fairly mature when

compared and contrasted to other western markets (Mair and Khan, 2015) and this

difference in the economic environments and regulations needs to be taken into

consideration (Othman, 2003). It is therefore recommended that the items are re-

examined and potentially re-defined taking into account differences in each country’s

context and environment.

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Second, almost one third of the sample (32%) in this study held an Islamic bank

account. This is a relatively small number and reflects the market share of Islamic

banks in the UK (Griffiths, 2010). Future studies should, however, try to address this

issue and seek to obtain a higher number/proportion of Islamic bank account holders.

This may be achieved by obtaining the support and co-operation of the Islamic banks

to help distribute the questionnaires. Caution would however need to be exercised

however when analysing the results which may be specific to the bank providing

access.

Third, this study focused on Muslim customers, non-Muslim customers have not been

included in this research. Islamic banks are increasingly being viewed as an ethical

alternative to non-Islamic banks, positioned as ‘participant’ banks and therefore a

choice for non-Muslims particularly given the negative press non-Islamic banks have

received during the recent credit crisis and recession. What motivates non-Muslims to

bank with an Islamic bank would be another interesting and topical question to

investigate.

Finally, we alluded earlier to the need to undertake further detailed research into how

acculturation impacts service quality. This study considered British Muslims as one

group. We call for further research to identify how the different categories of

acculturation (Berry, 1997) can impact perceptions of service quality and banking

behaviour.

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25

Table 1. Respondent profile

Grouping Percentage

Gender

Male 58.3

Female 41.7

Age

Up to 30 48.8

31-40 31.5

41-50 15.3

51 plus 4.4

Education Below secondary school 3.7

Secondary school and above 24.7

University degree 34

Above degree 37.7

Income Less than £10000 30.5

Over £10000-£20000 35.6

Over £20000-£35000 22.5

Over £35000 11.3

Marital status Married 51.7

Single 48.3

Ethnic origin British 9.1

Arab 35.7

Asia 40.9

Other 14.3

Occupation Professional 39.9

Semi skilled 14.4

Managerial 11.7

Student 23.4

Not employed 10.7

26

Table 2 Service Quality Dimensions

Items F1 F2 F3 F4 F5

Friendly employees 0.739

Polite employees 0.736

Helpful employees 0.721

Knowledgeable employees 0.715

Employees give you individual attention 0.662

Speed of transactions 0.633

Bank resolves the problem quickly 0.615

Efficient transactions 0.602

Short waiting time in bank 0.534

Confidence in bank’s Shariah advisors 0.718

Bank runs according to Islamic law 0.716

Confidentiality of customer information 0.706

Secure banking 0.662

Accurate bank statement 0.620

Confidence in bank’s management 0.617

Safe from political action 0.568

Wide range of Islamic products 0.549

Clear communication 0.542

Easy bank to deal with 0.484

Bank reputation 0.466

Female staff wear hijab 0.865

Bank has a prayer room 0.807

Closing for Friday prayer time 0.787

Separate department for ladies 0.725

Bank has Islamic appearance 0.658

Number of cash machine available 0.715

Convenient opening hours 0.710

Wide range of Islamic services (eg

financial advisor)

0.614

Low services charge 0.607

Convenient bank location 0.586

Bank size 0.804

Well known bank 0.721

Bank’s building has Islamic architecture 0.694

Modern looking equipment 0.639

27

Table 3: Importance for Islamic and non-Islamic bank account holders

Islamic bank account

holders

Non-Islamic bank account

holders

Items Asymp.

Sig

Mean rank

Median Mean rank

Median

Secure

banking

.001 118.97 5.00 147.26 5.00

Helpful

employees

.005 122.77 4.00 148.48 5.00

Safe

from political

action

.010 125.73 4.00 149.02 5.00

Bank

resolving

problems

quickly

.012 127.79 4.00 151.19 5.00

Low service

charges

.014 116.47 4.00 139.55 4.00

Convenient

bank location

.023

128.56 4.00 150.10 5.00

Convenient

opening hours

.027

125.47 4.00 146.44 4.00

Friendly

employees

.030

129.25 4.00 149.55 4.00

Confidence

in bank’s

management

.032

128.84 4.00 148.34 5.00

Bank

reputation

0.39

125.83 4.00 145.23 4.50

Polite

employees

.049

130.58 4.00 148.83 5.00

Confidentiality

of

customer

information

.050

132.35 5.00 147.29 5.00